LMSs: Bells, Whistles and a Few Flat Notes

If you’ve ever wondered just what you were thinking when you purchased your company’s current learning management system (LMS), or perhaps thanked your lucky stars that you made the right choice, you’re not alone. Research and advisory firm Bersin & Associates released its report “LMS Customer Satisfaction 2005: An Industry Analysis of the Customer Experience,” validating common beliefs and perceptions, and spotlighting the direction LMSs are liable to take in the future so potential buyers can make better choices.

The report analyzed 16 LMS vendors for small, medium and large companies on 28 different measures of satisfaction, which were then correlated against nine possible dimensions, things that cause customer satisfaction to be higher or lower, such as company size, whether the company runs the learning management system internally or externally on a hosted system, how many years they’ve had it and how much budget they spend. The measures answered questions such as: Does the solution meet business needs? Was the implementation on budget? Is the product easy to use for learners and administrators? How easy was the product to install, upgrade or customize? How well does the product integrate with e-learning content and HR or other PC systems?

While the research produced a number of ratings, its purpose was to evaluate categories, such as product and technical support, customer service, business partnership and implementation, from the customers’ perspective.

“This is all rated by customers,” said. Josh Bersin, president and founder, Bersin & Associates. “We didn’t get any survey responses from people who just have opinions.” Companies such as GeoLearning, Learn.com and SumTotal Systems scored well in some areas, and smaller, emerging companies such as RISC in Houston, MeridianKSI and NetDimensions, a company in the Far East that has started to sell in the United States, also scored high with customers.

“One of the biggest factors that effects overall satisfaction is not satisfaction with the product features themselves, but whether they’re getting the right level of support, technical support, service and do they have a business partnership with their vendor,” Bersin said. “Second, we found a significant difference in overall satisfaction in many of the measures between companies that run their systems internally versus companies that outsource them or run them on hosted platforms. The hosted platform customers are generally more satisfied with the ease of implementation and customization. They have lower cost of ownership, and they’re much less likely to want to switch suppliers.”

Customers interested in replacing their LMS are often dissatisfied because they are running systems with little to no support from the vendor, or they have older systems that require costly upgrades in order to bring functionality up to the level of service they need. The LMS market has grown significantly since many of the early systems were installed, Bersin said, as have the options available. “Every year, features are added to learning management systems, and in a way, what a learning management system does changes a little bit. If you look back four or five years ago, what these products did was very different from what they do today. If you were a pioneer and you bought one of these systems back in 2000 or 1999, which almost 25 percent of the customers in the market are at that stage, chances are you’re missing a lot of things. The only way you can get those new features is by upgrading.”

Unfortunately, Bersin noted that many vendors on the market have not made it easy for customers to upgrade their software. “There’s a fairly large number of companies sitting on back-level releases of software that are missing functionality that now is current, and they’ve reached a point where they say, ‘Well, the cost of upgrading is about the cost of replacing, so maybe we’ll just start over and look for a new vendor.’ The challenge for buyers in this particular market, the cost of implementing a learning management system is very high. If the software costs $300,000, the implementation might cost $1 million. The implementation is usually two to three times the cost of the software. Over time, it’s even more. It tends to vary by the type of deployment—whether it’s a departmental system or an enterprise-wide system. A departmental system is much less expensive to implement. People buy these systems, spend a lot of money implementing them, and then they find out four or five years later that they have to go through a major change.”

Companies that run LMSs on hosted platforms or have outsourced or managed services tend to have less of this problem because the vendor takes responsibility for upgrading the software externally. Vendors provide three types of services:

Implementation services, where the supplier goes in, installs the software and gets it running, which is very important in terms of customer satisfaction.

Technical support or fixing bugs and solving problems, which the report found has an even greater link to customer satisfaction, since many organizations do not have the technical staff available to handle problems when they crop up.

General consulting, where vendors do almost anything a company asks: write a report, help integrate content—even develop a training program to go with the LMS.

“Companies like GeoLearning, KnowledgePlanet, to some degree Learn.com, are starting to add general back-office services for training where you can call them up and say, ‘I need a report developed. I want to launch a program and here’s the content. Would you integrate it into the LMS for me? I want to change the user interface on my system would you change it from blue to yellow?’ All those kinds of things that people need help with, GeoLearning, KnowledgePlanet and Learn.com tend to do a lot more. In a way, they’re a more than a learning management system company. They’re a training consulting company or training services company, and the customers like that,” Bersin said.